Statutory Sick Pay – What’s Changed and What It Means for Employers

As a UK employer, managing sickness absence and payroll compliance is already complex. But with the Employment Rights Act 2025 introducing major reforms to Statutory Sick Pay (SSP) from 6 April 2026, the landscape is shifting significantly. These changes, removing the three-day waiting period and the Lower Earnings Limit; will expand entitlement, increase costs for many businesses, and require updates to policies, payroll systems, and absence management practices.

At Employment Law Services (ELS) LTD, a Glasgow-based firm providing UK-wide employment law and HR support to employers, we’ve been guiding clients through these upcoming changes. An Acas survey in early 2026 found that 43% of employers viewed the day-one SSP entitlement as the single biggest impact from the new employment rights package, outpacing even unfair dismissal reforms. With tribunal claims already rising and more employees qualifying for SSP, proactive preparation is essential to avoid compliance slips, unexpected payroll hits, or disputes.

Recent Acas polling (February 2026) confirms the scale: 43% of employers ranked the day-one SSP entitlement as the single biggest impact from the Employment Rights Act 2025—higher than unfair dismissal changes or paternity leave reforms. With the flat SSP rate rising to £123.25 per week from 6 April 2026, and low earners now receiving the lower of 80% of average weekly earnings or the flat rate, payroll costs could rise noticeably for businesses with frequent short absences or part-time staff. HMRC’s February 2026 Employer Bulletin urges early system updates and policy reviews to avoid compliance errors. Acting now prevents surprises when the changes hit.

This blog explains the key changes effective from April 2026, contrasts them with the current rules (as of March 2026), outlines the implications for employers, and shares practical steps to get ready. If you’re concerned about how these reforms will affect your business, read on, and consider booking a free consultation with us at the end.

Current SSP Rules (Pre-6 April 2026)

Under the existing framework (as of February 2026):

Eligibility: Employees must earn at least the Lower Earnings Limit (LEL), currently £125 per week on average (rising to £129 from April 2026 in the old rules). This excludes many part-time or low-paid workers.
Waiting Period: SSP starts from the fourth qualifying day of sickness (three “waiting days” unpaid, unless linked periods apply).
Rate: A flat weekly rate of £118.75 (2025/26 tax year), paid for up to 28 weeks. No percentage calculation for lower earners.
Qualifying Days: SSP is paid only for days the employee would normally work (e.g., not weekends if they don’t work them).
Linked Periods: Absences linked within eight weeks count towards the same spell, avoiding repeated waiting days.

These rules have been in place for years, but the Employment Rights Act 2025 phases in reforms to make SSP more inclusive and supportive, while increasing employer obligations.

Key Changes from 6 April 2026

The Act introduces two fundamental shifts, confirmed in HMRC’s February 2026 Employer Bulletin and government guidance:

1. Removal of the Three-Day Waiting Period – Day-One Entitlement

SSP becomes payable from the first full day of sickness absence. No more unpaid waiting days.

This applies to any qualifying sickness spell (even single-day absences).
For short, frequent absences, costs could rise noticeably, especially in sectors like retail, hospitality, or care with higher short-term sickness.

2. Abolition of the Lower Earnings Limit

All eligible employees qualify for SSP regardless of earnings. No minimum weekly threshold.

This opens entitlement to part-time, zero-hours (if eligible otherwise), and lower-paid workers previously excluded.
For low earners (below the flat rate), SSP will be the lower of:
80% of their average weekly earnings (AWE), or
The statutory flat weekly rate.

3. Updated Flat Rate

From 6 April 2026, the standard SSP weekly rate rises to £123.25 (up from £118.75).

Daily rates are pro-rated based on qualifying days.
For higher earners, the flat rate still caps the amount; for lower earners, the 80% AWE rule applies if it’s less.

Other rules remain: SSP lasts up to 28 weeks, is taxable, and employers can reclaim some via SSP percentage threshold if eligible (though recovery is limited).

What This Means for Employers: Practical Implications

These reforms will have varied impacts depending on workforce size, pay levels, and sickness patterns:

Increased Payroll Costs Day-one pay + broader eligibility = higher SSP bills. Businesses with many low-paid or part-time staff (e.g., retail, hospitality, social care) face the biggest hit. Short absences that previously cost nothing now trigger payments.
More Frequent Short Absences Covered Single-day or two-day illnesses now attract SSP (if the employee qualifies otherwise). This could encourage better absence reporting but also increase admin and costs.
Payroll and System Updates Needed Payroll software must handle:
No waiting days.
80% AWE calculation for low earners.
Eligibility without LEL check. Many providers (e.g., HMRC-recognised systems) are updating, but test runs are advised.
Absence Management and Policies Review sickness policies for fairness and consistency. Strengthen return-to-work interviews, occupational health referrals, and support for long-term absence to manage costs. Poor handling risks discrimination claims (e.g., disability under Equality Act).
Employee Relations Positive: Shows support for sick workers. Negative: If costs lead to tighter scrutiny, it could strain morale.
Reclaim and Offsetting SSP remains reclaimable above the threshold (if payroll > £45,000 NI liability annually), but changes don’t alter this much.

Overall, Acas and government stress preparation: Update contracts/handbooks, train managers, and model cost impacts.

Steps Employers Should Take Now (February 2026)

Audit Your Workforce: Identify low-paid/part-time employees who will newly qualify.
Model Financial Impact: Estimate extra SSP costs using your absence data.
Update Payroll Processes: Ensure software complies; liaise with your provider.
Revise Sickness Policies: Align with day-one pay; include clear reporting, fit notes, and support.
Train Managers: On new rules, fair absence handling, and avoiding discrimination.
Seek Expert Advice: Review contracts, policies, and strategies early.

How Employment Law Services Can Help

At ELS, our fixed-fee annual retainers provide unlimited access to specialist advice on SSP reforms, sickness policies, absence management, and compliance. We can:

Review/update your sickness absence policy and handbook.
Advise on payroll implications and fair processes.
Support with manager training or template documents.
Help model scenarios and mitigate risks.

Don’t wait until April 2026 catches you out. These changes are significant, but with preparation, you can manage them effectively.

Book a free, no-obligation consultation today to discuss your specific setup and how we can support you through the transition. Contact us, our UK-wide team responds quickly (online or in-person).